Expedia-Orbitz Merger Would Short Sheet Consumers, Hotel Group Says

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Aug. 6, 2015, 3:24 PM GMT / Updated Aug. 6, 2015, 3:24 PM GMT

By Associated Press

NEW YORK -- The hotel industry is objecting the proposed combination of travel booking sites Expedia and Orbitz, saying that the deal would mean higher prices for vacationers and larger fees for hotel owners.

"We believe this transaction and the resulting consolidation of the online travel marketplace will result in significant negative consequences, particularly for consumers, but also for the large number of our members who are small business owners and franchised properties," Katherine Lugar, CEO of the American Hotel & Lodging Association, said in a statement Thursday.

The hotel trade group said the deal would "severely reduce consumer choice." It also noted that Expedia charges hotels, on average, 11 percent higher commissions than Orbitz.

Many smaller, independent hotels rely on these sites to attract travelers who otherwise would not have heard of their properties.

If the merger goes through Expedia and competitor The Priceline Group Inc. will control 95 percent of the online travel agency bookings in the U.S., according to the hotel trade group. Priceline owns sites such as Booking.com and Kayak.

Expedia agreed to buy Orbitz for $1.3 billion in February and more than 99 percent of Orbitz shareholders approved the sale in May. Expedia had hoped to complete the purchase in the second half of 2015, but the U.S. Department of Justice is still reviewing the deal.